RAM Ratings affirms Amanat Lebuhraya Rakyat’s AAA rating

Published on 08 Nov 2023.

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RAM Ratings has affirmed the AAA/Stable rating of Amanat Lebuhraya Rakyat Berhad’s (ALR or the Issuer) RM5.5 bil Senior Sukuk Programme (2022/2044) (the Sukuk).

The affirmation reflects ALR’s superior ability to meet its profit and principal obligations under the Sukuk, backed by its portfolio of four strategically aligned highways. Our stressed projections assume slightly higher average daily traffic (ADT) in the coming year, balanced by heftier costs. We also assume a tax refund from the Inland Revenue Board to be delayed to September 2024. Accordingly, the cash flow and cash accretion of the four highways are anticipated to support the Issuer’s steady debt servicing ability, translating into respective minimum and average finance service coverage ratios of 2.25 times and 5.19 times (with cash balances) throughout the tenure of the Sukuk (base case: 2.95 times and 11.58 times, respectively). These levels are commensurate with an AAA-rated transaction. 

Save for the SMART tunnel, the highways’ traffic volumes returned to pre-pandemic levels in 1H 2023. The aggregate ADT of the four highways leapt 39.7% y-o-y last year to 898,889 vehicles, rising another 10.0% in the first eight months of 2023 (8M 2023) to 965,849. This is largely within RAM’s expectations, excluding the festive months of January and April 2023. 

ALR’s operational expenses in the initial months of the transaction were higher than anticipated, due in part to highway-related expenses incurred after the expressways were acquired (i.e., pavement cost) and staff bonuses. Actual costs for 8M 2023 were within the projected range. On balance, the transaction’s deferred equity in the form of a RM60 mil deferred consideration owed by ALR to the vendor of the Shah Alam Expressway (KESAS) – which has yet to be paid out – helped shore up the transaction’s liquidity.

ALR was incorporated on 13 December 2021 for the sole purpose of acquiring and holding the four concession companies which own the highways – Damansara-Puchong Expressway, KESAS, SPRINT Expressway and SMART Tunnel. 

Subsequent to the completion of the acquisitions on 13 October 2022, the concession companies are wholly owned by the Issuer. Of note, ALR’s shareholders are not profit motivated, while its charter and mandate require the Issuer to ensure the toll rates of highways that it acquires are affordable, settle the debts of the acquired entities and return the highway assets to the government in the shortest possible timeframe.


Analytical contacts
Karin Koh, CFA
(603) 3385 2508

Davinder Kaur Gill
(603) 3385 2525

Media contact
Sakinah Arifin
(603) 3385 2500


The credit rating is not a recommendation to purchase, sell or hold a security, inasmuch as it does not comment on the security’s market price or its suitability for a particular investor, nor does it involve any audit by RAM Ratings. The credit rating also does not reflect the legality and enforceability of financial obligations.

RAM Ratings receives compensation for its rating services, normally paid by the issuers of such securities or the rated entity, and sometimes third parties participating in marketing the securities, insurers, guarantors, other obligors, underwriters, etc. The receipt of this compensation has no influence on RAM Ratings’ credit opinions or other analytical processes. In all instances, RAM Ratings is committed to preserving the objectivity, integrity and independence of its ratings. Rating fees are communicated to clients prior to the issuance of rating opinions. While RAM Ratings reserves the right to disseminate the ratings, it receives no payment for doing so, except for subscriptions to its publications.

Similarly, the disclaimers above also apply to RAM Ratings’ credit-related analyses and commentaries, where relevant.

Published by RAM Rating Services Berhad
© Copyright 2023 by RAM Rating Services Berhad

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